Nepal Inflation at 10.2 percent in March 2013

KATHMANDU: A sharp hike in prices of key food items, clothes, footwear, and housing and utilities cost pushed inflation to 10.2 percent in March as against seven percent reported in the same period last year.

The inflation recorded in the period was 0.7 percentage point higher than the revised annual target of 9.5 percent.

On average, prices of food items shot up by 11.3 percent, while prices of non-food items went up by 9.3 percent in March, the latest macroeconomic report of Nepal Rastra Bank made public on Tuesday shows.

Prices of cereal grains and their products, which contribute to 14.81 percent to the inflation basket, rose by 12.9 percent during the month, while prices of meat and fish soared by 17.1 percent. Similarly, ghee and oil became dearer by 13.9 percent and prices of legume varieties increased by 12.6 percent in the same period.

Among non-food items, prices of clothes and footwear went up by 11.5 percent, while housing and utilities cost increased by 9.7 percent in March. Similarly, education cost soared by 12.5 percent and transport cost went up by 8.4 percent in the review period.

Data show consumer prices increased by 10.8 percent in Kathmandu Valley followed by 10.2 percent in the Terai and 9.6 percent in the hilly region of the country in March.

Inflation has remained on the higher side so far this year because of lower agricultural harvest, wage pressures, hike in fuel prices, continued power shortages and supply-side constraints like presence of layers of intermediaries and black marketeering.

It is said supply-side constraints, depreciation of Nepali rupee against major currencies as in the recent case, rising wages and structural problems like lack of or low quality of infrastructure make two-third contribution to price hike in the domestic market. The rest is attributed to rising prices in India, from where Nepal imports most of its goods.

Despite double digit hike in consumer prices, wages increased by only 7.8 percent in March, with agricultural laborers witnessing 12.5 percent hike in wages. Wages of construction workers, on the other hand, went up by 8.1 percent in March, while carpenters saw their wages go up 6.1 percent.

Those working for the government, public corporation and banks and financial institutions, meanwhile, were biggest losers in March as they did not see any hike in their salaries.

Source: myrepublica, 16th April 2013

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Gold Price Falls by Rs.3000 in Nepal

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Gold Price falls by Rs.3000 in Nepal

KATHMANDU: Gold price saw a further slide on Tuesday by Rs 3,000 per tola (11.664 grams). With the decrease, the yellow metal will now cost Rs 49, 500 per tola.

On Monday, the price of the yellow metal had decreased by Rs 3,300 per tola in the domestic market as investors fled from bullion to other safe-havens in the international market.

The yellow metal was traded at two-year low of Rs 52,500 per tola on Monday. Gold had hit Rs 52,490 per tola in August, 2011. It climbed to all time high of Rs 61,850 on November 25, 2012.

Gold fell to $1,450 per troy ounce in the international market on Saturday, down from $1,560 per troy ounce recorded on Friday. Though daily demand for gold hovers over 30 kg, Nepal Rastra Bank (NRB) is supplying only 15 kg a day through designated commercial banks.

“The drastic drop in price is due to the drop in gold prices in international markets as investors are fleeing from commodities market and investing on property, equity and fixed deposits where the rate of return is high,” Mani Ratna Shakya, president of Federation of Nepal Gold and Silver Dealers´ Associations, said. “Strengthening US stock market and economy due to Euro and Cyprus issues is the other reason behind investors´ shift.”

The massive drop in gold price led to rise in demand for the yellow metal on Monday. According to Shakya, demand for gold increased by around 5 kg on the day. “Many investors are in wait and see mood expecting further drop in prices,” he added.

Source: myrepublica, 16th April 2013

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NRB Relaxes Know Your Customer Rules

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Happy New Year 2070!

We would like to thank all our valued customers and members for your continued support. Wishing you a very Happy New Year!

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NRB relaxes Know Your Customer rules

The Nepal Rastra Bank has allowed banks and financial institutions (BFIs) to determine themselves the requirements that customers have to fulfil while opening bank accounts with deposits less than Rs 500,000.

Moreover, people can also open bank accounts by producing photocopies of passport, permanent account number (PAN) cards, identity cards of government, public and private offices. In case of teachers, professors and other staff of government schools, colleges and universities, they can open accounts by producing photocopies of their identity cards provided by the institutions they are working, states new “Know Your Customer” directive issued on Friday.

The revised directive has also removed the earlier provision that required individuals to produce citizenship number of ancestors going back to three generations, limiting the requirement to disclosure of personal information and names and surname of three generations.

“The new KYC directive has surprised me because the NRB has given us more than what we wanted,” said Ashoke Rana, chief executive officer of Himalayan Bank Limited. “This has enabled all to open accounts. This will help increase the number of bank accounts.”

The central bank’s move came after complains from BFIs that the previous provisions caused sharp decline in new account opening and even old depositors started closing their accounts.

“The move was taken to ease account opening and is based on international practices,” said NRB Spokesperson Bhaskarmni Gnawali. “We simplified the provision after consultations with the Financial Information Unit (FIU), which looks after money laundering issues.”

According to the NRB directive, this provision is only applicable to those willing to open new accounts. Existing accountholders will not have to produce new documents. Gnawali, however, said the provisions for foreigners have not been revised.

President of Nepal Bankers’ Association Rajan Singh Bhandari welcomed the NRB move, saying it would encourage account opening at a time when existing accountholders were also seeking to close their accounts due the lengthy re-verification process. “Letting people open bank accounts by producing documents other than citizenship certificates is a welcome move. Such practices are prevalent in the US and Europe too,” he said.

Source: ekantipur.com, 6th April 2013

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Norway offers to assist Nepal in building Transmission Lines

Norway is interested to help Nepal build electricity transmission lines and ultimately remove one of the major bottlenecks in evacuation and distribution of hydropower.

"We are ready to provide assistance to the Nepal government if it comes up with strategic plans to develop transmission lines in the country," Alf Arne Ramslien, Norwegian ambassador for Nepal, said at an interaction on ´´Norwegian assistance to Nepal in hydropower development: Challenges and Opportunities´ organized by Society of Economic Journalists Nepal (SEJON) on Tuesday.

Highlighting the importance of hydropower in the country´s development, Ramslien said erection of transmission lines is a major task to tap the country´s hydropower potentials. “There are challenges as well as opportunities in hydropower development in Nepal," Ramslien said speaking in the interaction on ´Norwegian assistance to Nepal in hydropower development: challenges and opportunities´ organized by Society of Economic Journalists Nepal (SEJON).

Stressing the need for political stability and policy consistency for economic development, Ramslien said the government should come up with strong plans if it wants Norwegian support to help build transmission lines. “The power trade agreement between Nepal and India is important to build North-South and cross border transmission lines," Ramslien added.

He also said the Norwegian government was ready to support Nepal in conducting feasibility study of different large scale projects.

“Our efforts will be on helping Nepal. We want to invest here as the country has comparative advantage in hydropower sector,” Ramslien said, adding that the Norwegian Embassy in Nepal is currently working on developing new plans to support Nepal in energy sector.

According to information posted on website of Norwegian Embassy in Nepal, the Norwegian mission is working on accelerated hydropower development, rural renewable energy development and technical energy development.

"The embassy is planning to enter into a co-financing agreement with the Asian Development Bank for development of transmission projects in Nepal," the Norwegian mission in Nepal has posted on its website.

Source: myrepublica (Feb 6th, 2013)

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Nepal offers huge investment opportunities-Ambassador of UAE

Non-resident ambassador of the UAE to Nepal Mohamed Sultan Abdalla Al Owais, speaking at a programme here today, said that Nepal offers a lot of opportunity to investors.

“In the last four years of my tenure in New Delhi, UAE has doubled its trade volume with India,” he said, adding that the UAE wants to replicate the same in Nepal too.

The New Delhi-based envoy said that a team of United Arab Emirates businessmen will visit Nepal soon to explore business opportunities.

Though UAE is largely known as one of the key destinations for migrant workers, the trade volume between the two countries has also been increasing in recent years.

Nepal had exported merchandise worth Rs 326.300 million to UAE in fiscal year 2010-11, according to figures of the Trade and Export Promotion Centre (TEPC).

UAE — the 29th largest trading partner of Nepal — had exported merchandise worth Rs 13.61 billion to Nepal in the fiscal year, the data revealed, adding that Nepal’s trade deficit with UAE stood at Rs 13.28 billion in fiscal year 2010-11.

Likewise, Nepal’s exports to UAE in 2012 stood at Rs 322.99 million, whereas it imported merchandise worth Rs 37.66 billion, according to the TEPC data. “On the basis of export volume, UAE is the 19th largest export destination of the country.”

The United Arab Emirates (UAE) is the largest supplier of gold to Nepal.

Nepal imported some 87.6 per cent of gold from the UAE in fiscal year 2010-11, the TEPC data revealed, adding that the country had imported gold worth Rs 9.95 billion from the UAE, out of the total gold imports of Rs 11.35 billion.

Likewise, in fiscal year 2009-10, the country had imported 68.4 per cent — Rs 28.5 billion out of the total import of Rs 40 billion — gold from the UAE.

Besides gold, major imports from UAE include edible oil, beverage, fuel oil, petroleum bitumen, and polyethylene, whereas Nepal exports large cardamom, woolen shawls, scarves, and mufflers, among others to the UAE.

“There is a need to enhance trade relations in the interest of both the countries,” the envoy said.

Nepal and the UAE entered into diplomatic relations in January 1977.

Likewise, the then Royal Nepal Airlines started its flight to Dubai in 1985 in transit to its European destinations. Currently, Etihad Airlines, RAK Airways, and Fly Dubai are some of the airlines of UAE catering to the needs of travellers, mostly migrant Nepalis to and from UAE, which is also one of the key sources of remittance inflow to the country.

Source: The Himalayan Times (Feb 4th, 2013)

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OMA Emirates launches subsidiary in Nepal

OMA Emirates — a leading global business solution provider in the Middle East — has announced the launch of its subsidiary OMA Nepal.

With the launch of OMA Nepal, the company based in Dubai brings its wide range of product and service offerings to the financial sector of Nepal, said group chief executive of OMA Emirates Niranj Sangal, here today.

The company provides cutting edge technology solutions in the area of card personalization, payment issuance and payment acquiring systems through a global delivery platform, he said, adding that the company has provided its service to Himalayan Bank in Nepal.

The pioneer of payment solutions of the Middle East has successfully completed the NanoSwitch for Himalayan Bank.

NanoSwitch is a fully integrated banking Switch and Card Management System (CMS) that is capable of managing ATM and Point of Sales devices and acts as the central interface for all payment and banking activities.

“With our in-house team of qualified and creative software developers, we provide a full fledged and flexible system that takes cognisance of the entire issuance and acquiring requirements of Himalayan Bank,” chief executive of OMA Emirates Niranj Sangal added. “Moreover, our indigenous solution is highly cost effective from the financial aspect of the project.”

“As one of the most prominent banks in the country, we have an ongoing need to modernize our banking systems and lead the way for other financial institutions,” said chief executive of Himalayan Bank Ashoke SJB Rana, on the occasion.

“The bank looks forward to a rewarding experience in our partnership with OMA Emirates in creating an indigenous NanoSwitch solution,” he said, adding that the complete guidance extended by OMA’s highly skilled professionals and ease of installation met the bank’s clear cut requirements.

“The implementation of the new system — that cost the bank $300,000 — will be completed by mid-March,” Rana said.

OMA Nepal is dedicated and fully committed to serving the different industries including the banking and finance sector of Nepal, according to the company.

“With OMA Emirates drawing huge success across several markets in the Middle East, Europe and Asian subcontinent, the company looks forward to attaining the same with the launch of its subsidiary OMA Nepal, in the country,” the company said.

OMA also plans to launch a full-fledged support, and Research and Development (R&D) centre to provide end-to-end service to its customers as it is aiming at providing Business to Consumer (B2C) services. “Its facility shall also provide support services to East Asian countries.”

Source: The Himalayan Times (Feb 4th, 2013)

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